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LONDON (Alliance News) - London's main indices were flat Friday midday, with oil-related stocks pushing higher, while Wall Street futures pointed to a lower open, following a rebound of two consecutive session of sharp gains.
The FTSE 100 was flat at 6,189.98, the FTSE 250 was flat at 16,919.12, while the AIM All-Share was up 0.6% at 730.81.
"Considering the volatility that we have seen this week and the fact we are about to embark on a long bank holiday weekend, it is no real surprise that UK traders are taking the opportunity to unwind positions," said IG analyst Alastair McCaig.
Meanwhile, European major indices were down, with the CAC 40 in Paris falling 0.4% and the DAX 30 in Frankfurt down 0.6%, ahead of the release of the German consumer price index, due at 1300 BST.
US stocks were called to open lower Friday after two consecutive sessions of sharp gains. The DJIA and the Nasdaq 100 were expected to open down 0.7%, while the S&P 500 was seen down 0.8%.
Asian major indices were mixed Friday, with the Japanese Nikkei 225 ending up 3.0%. In China, the Hang Seng fell 1.0%, but the Shanghai Composite closed up 4.8%.
The People's Bank of China reportedly intervened in the market, ordering state banks to buy the yuan at designated rates on behalf of the monetary authorities to prevent currency devaluation. China's local pension funds will begin investment in stocks and other assets worth CNY2 trillion as soon as possible, reports said.
The yuan advanced to a 4-day high of CNY6.3880 per dollar, and held steady thereafter.
In the US, investors will focus on the Jackson Hole Symposium, which started on Thursday. While US Fed Chair Janet Yellen is not expected to attend, speeches from Fed Vice-Chairman Stanley Fischer, European Central Bank Vice-President Vitor Constancio and Bank of England Governor Mark Carney will take the market's attention on Saturday.
Analyst warned that the economic data releases expected in the US calendar on Friday could prompt some volatility towards the end of the European and US sessions.
Oanda analyst Craig Erlam said he believes that the core personal consumption expenditure price index, "the Fed's preferred inflation measure", is of particular interest given that this is the biggest factor standing in the way of a rate hike by the US central bank.
Core personal consumption, due at 1330 BST, is expected to repeat the previous month-on-month reading seen in June of a 0.1% rise. Also, the Reuters/Michigan consumer sentiment index was due at 1500 BST.
Meanwhile, in the UK, the economy grew at a faster pace in the second quarter, in line with initial estimates, latest figures from the Office for National Statistics showed Friday.
Gross domestic product advanced 0.7% quarter-on-quarter in the second quarter, confirming the flash data. In the first quarter, the economy expanded 0.4%. On an annual basis, GDP growth eased to 2.6% in the three months ended June from 2.9% in the preceding quarter. The figure was also came in line with preliminary report.
"Given the panic in the financial markets in the last couple of weeks it?s tempting to think that something very serious is going on and in the UK we should be worried. At the moment, these concerns are somewhat overstated," said Kallum Pickering, senior UK economist at Berenberg.
"The UK?s domestic health is good, and it?s key neighbours - namely the US and Europe - are showing solid improvements. Therefore, the UK is well placed to brace headwinds from afar and we forecast growth of 2.6% per annum over the next two years," wrote Pickering.
The pound slightly retreated after the data and was standing at USD1.5381, having traded at USD1.5408 prior to it.
On the London Stock Exchange, oil-related stocks were amongst the best performers in the FTSE 100, benefiting from a jump in Brent and West Texas Intemediate crude oil prices overnight. Glencore was up 2.5%, though still trading close to all-time lows, BG Group up 2.0%, Royal Dutch Shell 'A' up 1.8% and BP up 0.8%.
Brent oil was at USD47.26 a barrel, having traded at USD45.81 a barrel at the London close on Thursday, while WTI was at USD42.34 a barrel, having traded at USD41.92 a barrel when European markets closed.
In the FTSE 250, Marshalls was up 5.6%. The landscape products company said its pretax profit leaped in the first half of 2015 on the back of better revenue and improved margins. It said its pretax profit in the six months to the end of June was up to GBP20.8 million, compared to a GBP14.0 million profit a year earlier, a 48% rise. The group's revenue rose to GBP199.1 million from GBP180.0 million and its operating margin improved to 11.1% from 8.7% a year earlier.
Rotork was up 2.3% after it said it has agreed a GBP125.0 million deal to acquire Manchester-based pneumatic and hydraulic instrument valves and components company Bifold Group. The FTSE 250 actuators and flow control products manufacturer said Bifold has leading positions in a number of niche sectors, including subsea and wellhead control systems. It will be integrated into Rotork's instruments division following the acquisition.
Meanwhile, Bacanora Minerals, up 20%, and Rare Earth Minerals, up 16%, were amongst the biggest gainers in the AIM All-Share. Both companies said their Sonora lithium project in Northern Mexico has signed a lithium supply deal with Tesla Motors, the US-based electric sports car and energy storage products company.
On condition that the Sonora project reaches certain performance milestones in the next two years, Tesla will buy lithium hydroxide to feed the manufacturing of batteries at its Gigafactory in Nevada. One of the conditions will be that the Sonora project can supply lithium hydroxide in accordance with volumes and timeframes which Tesla will determine.
Motive Television was down 20% after it reported a slightly widened pretax loss for its first half as it continued to develop and invest in its new products, which offset a reduction in its administrative costs.
By Daniel Ruiz; danielruiz@alliancenews.com
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